Joseph Houlihan: Eight Steps to Buying a Home
Joseph Houlihan, Managing Partner, Houlihan & O'Malley Real Estate Services
Mar. 30, 2016: Just making the decision that you're committed to buying a new home is exhilarating. It is a time brimming with possibility and the potential to find not just a new place in which to dwell, but a new quality of life. Buying a new home can mean new possibilities for your family, new rooms to decorate the way you like, and new scenery to enjoy.
The decision is just the beginning of an adventure that can be filled with discovery. However, it also can be frustrating, especially if you don't know what to expect from the actual process of purchasing a new home.
How do you decide what type of home you prefer--a Dutch Colonial, a Cotswold Tudor, something contemporary? And how much can you afford? Should you get pre-approved for a mortgage? What's involved in closing the deal?
Here's an eight-step guide to the process that can help you refine your choices and navigate the process.
Step 1: Define your goals. Take stock. Determine what type of home you want and where you want it to be. Make a wish list of items that you would like in your "dream home," including square footage, number of bedrooms and bathrooms, style and age of house, and lot size.
Step 2: Go over your finances. Figure out what you can afford and how big a mortgage you can take on.
Step 3: Contact a real estate professional. Seek the assistance of a professional Realtor® who understands the local market and has an in-depth knowledge of the area's communities. They can help guide you through the property search, financing, negotiations, and transaction process. They can help you from the very beginning of your search through the day you close.
Step 4: Get pre-approved. The pre-approval process involves meeting with a lender and authorizing it to examine your current financial situation and credit history. On the basis of these findings, the lender will provide you with a document that details how much you need to borrow in order to buy your home. The mortgage pre-approval not only helps you plan, it also tells sellers that you're serious about buying when you make an offer.
Step 5: Do the search. It pays to start the search on a real estate website, where you can view as many homes as you like and zero in on what is of interest to you. You can also count on your Realtor® to save you time by diligently searching the market for homes that meet your criteria.
Step 6: Make an offer and negotiate. When you've found the home you want to buy, your Realtor® will make an offer on your behalf to the seller's Realtor®. Expect a counteroffer. You'll go back and forth until you and the seller agree upon the price, terms, and timing of the sale. After this is settled between you and the seller, you'll have an "accepted offer." It is at this point that you have inspections done--before you sign the contract of sale. Once the inspection items have been resolved, you'll meet with your attorney to sign the contract and provide a check for the contract deposit (usually 10 percent of the purchase price).
Step 7: Secure your financing. Once you have a fully executed contract of sale, you will have all the details you need to formally apply for a mortgage. Generally, there are two ways to go: a fixed-rate mortgage with an interest rate that remains the same for the life of the loan or an adjustable-rate mortgage (ARM) with a rate that adjusts up or down, depending on economic trends. Your Realtor® can refer you to some excellent mortgage professionals so you can make the best financial decision.
Step 8: Close the deal! Leading up to the closing, your attorney will order a title search. You will need to obtain a homeowner's insurance policy. On the closing date, you, your attorney, and your Realtor® will meet at the office of the lender's lawyer to pay the rest of the cash portion of the purchase price, sign all the mortgage documents, and pay the various closing costs. The sellers and their attorney will also attend. One last tip: Don't forget to get the keys. It's your home now.
Pictured here: Joseph Houlihan, managing partner at Houlihan & O'Malley Real Estate Services. His office is at 133 Parkway Road in Bronxville and he can be reached at 914-337-7888 or on his cell at 914-645-6640 or by email at
Photo courtesy Houlihan & O'Malley Real Estate Services
